SEC addresses obligation to disclose cyber threats, and may consider issuing additional guidance

In a June 6, 2011 letter to Senate Commerce Committee Chairman Jay Rockefeller (D-WV), Securities and Exchange Commission (“SEC”) Chairman Mary Schapiro stated directly that publicly traded companies should disclose material risks relating to data security breaches in their public SEC filings. Schapiro’s letter marks the first official statement from the SEC on whether potential cyber attacks should disclosed, demonstrating the rising concern about cyber threats to private business among shareholders, the SEC, and Congress.